SINGAPORE - Employers who hire older workers will receive government funding from next year to offset the cost of their wages and rising Central Provident Fund (CPF) contribution rates.
These are part of a new Senior Worker Support Package announced by Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 18) to help Singaporeans to work longer if they want to.
"Even as we support workers' aspirations to work longer, we hear employers' concerns. As part of our unique tripartite system, the Government has stepped up to support both our workers and our enterprises," said Mr Heng in his Budget speech.
The first measure is a Senior Employment Credit, which will provide wage offsets of up to 8 per cent - depending on the age of the employee - for employers of Singaporean workers aged 55 and above and earning up to $4,000 a month.
The highest amount is for workers who are at least the re-employment age, which is 67 now and will go up to 68 on July 1, 2022.
Employers of workers aged 55 to 59 can receive up to 2 per cent in subsidies next year, and then 1 per cent in 2022.
The new scheme runs for two years, from Jan 1 next year until the end of 2022, and replaces the Special Employment Credit and Additional Special Employment Credit schemes which expire at the end of this year.
The old schemes together provided employers with wage offsets of up to 11 per cent of monthly pay for Singaporean workers aged 55 and above and earning up to $4,000. Employers have been calling for the Special Employment Credit scheme to be extended further. It was extended twice before.
Employers will also receive a CPF transition offset to cover half of the increase in their contribution rates for older workers next year, up to the CPF salary ceiling of $6,000. Employers will be contributing 0.5 percentage point or 1 percentage point more for workers aged 55 to 70 next year, based on the worker's age.
Prime Minister Lee Hsien Loong had said in the National Day Rally last year that CPF contribution rates for those aged 55 to 70 will be raised gradually over this decade until those aged 60 and below enjoy the full CPF rates. The rates currently begin to taper down from 37 per cent after workers turn 55.
Also, the statutory retirement age will be raised from 62 now to 63 in 2022, and to 65 by 2030. The re-employment age ceiling will go up from 67 now to 68 in 2022 and then to 70 by 2030.
Details on the other two measures under the Senior Worker Support Package will be provided during the debate on the Manpower Ministry's budget in the coming weeks.
These are an early-adopter grant to support companies who formally raise their internal retirement age and re-employment age ahead of the national timeline, and a part-time re-employment grant for companies which commit to offering part-time work for eligible older workers who request it.
Mr Heng, who is also Finance Minister, said that seniors who choose to retire but want to continue to learn and stay active can tap the $500 SkillsFuture Credit top-up which will be given to all Singaporeans aged 25 and up from Oct 1 this year.
He said that the Government will provide more support to help Singaporeans remain active and contribute to society and the economy as they live longer.
"Lifelong learning and contribution do not stop at the 40s and 50s...Many seniors have told us that they want to continue working and learning. Besides saving more for retirement, it is about a sense of agency and purpose, and staying active and connected," he said.